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Trivia Tidbit Of The Day: Part 269 -- Tax Code Complexity.

Huge Tax Code Has Huge Consequences-

Last year, American businesses, individuals, and nonprofit organizations spent 6 billion hours doing their taxes. It also cost Americans more than a quarter of a trillion dollars just to comply with their taxes.

And it cost lower income folks more than wealthier folks to comply with the labrynthine tax code, on a relative basis:

When examined by income level, compliance cost is found to be highly regressive, taking a larger toll on low-income taxpayers as a percentage of income than high-income taxpayers. On the low end, taxpayers with adjusted gross income (AGI) under $20,000 incur a compliance cost equal to 5.9 percent of income while the compliance cost incurred by taxpayers with AGI over $200,000 amounts to just 0.5 percent of income.

Flatter, simpler tax code, anyone?

"Progressives" would solve this problem by sticking it to the rich and/or just raising the heck out of taxes and taking away those increasingly complicated deductions everyone loves (mortgage, etc.). The rest of us would gladly support major tax reform, making our tax code extremely simple and straightforward, to avoid this (.pdf):

Flatter, simpler, lower. It's worked before. It'll work again.

Source: The Tax Foundation(.pdf).

Stay tuned for more on America's tax code, as we near April 15.

Previous Trivia Tidbit: Windfall Taxes? How About Not.

Posted by Will Franklin · 15 February 2006 03:35 PM

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